All Forum Posts by: Mary R.

Does anyone know how Caldwell Banker does with their short sales? A friend has an offer on one of their short sales, and they haven't done anything on it. She's had the offer on for 5-6 months.
Is Caldwell doing the same as BofA as far as holding properties and selling them as REO's instead?
Should she hold on for a while or look elsewhere?
MRead

There’s a house to be auctioned in June. The balance on the loan is about $195K, the purchase price was about 240K. It was purchased weeks before the crash. Present ARV is about $130-140K.
I want to be as certain as possible that this is the first loan and there is no other. I would have a title co do a search for liens or work with an investor and have her do the searches.
Is it better to use one over the other?

I have not been in the house. It has been vacant for a few months and is locked. It was rented for a couple of years, to at least two groups, one family, one a couple of men. The outside that I can see looks good.

Another question:
The same model was recently listed for $117,000 as an REO. I saw it and turned it down because of location. I, with untrained eye, saw about 25K in repairs to make it sellable. ARV on that REO should be about the same, $130-140K.
I just checked the mls. That property is still listed as active.
Is it safe to assume that even investors don’t see it as worth $117K, or that things are not moving well yet?

The only differences I can see are location and size.
The one I want has a better location and a 400‘sq ft addition, a family room.
The lot is a little larger. Taxes are higher.

What is the bank likely to do? The banks are different. Will this bank bid up to its loan amount and sell it as REO? Will it let it go at a much lower price?
From what I’m reading here, the top that I should pay is about $85000. Is the bank likely to let it go at that price? Is it likely that this bank will come down to the asking price of it’s twin--$117K?

Would you let it go REO and purchase then, rather than trying to get it at auction?
MRead

I didn't figure property management in it-at least 10% a month.
MRead

Taxes : $1446 Tax Year : 2007
50% rule
income/month $1250
expenses 50% of that - $625
debt service and pre-tax profit. $625
minus taxes of 120.50/mo -130 ($20.50 is 2007, not 2008) 495
minus insurance 400/year - 33
leaving to pay mortgage 462

Is that right?

I could carry a loan of 69141.48 with no pocket money. right?

My understanding of the 50% rule then is that at 1250 a month rent, I can just afford to pay $69141.48 for it.
The 2% rule does not work here, then, right?
Or is it that since the 1250/ .02=65500, is less than 69, but close, I offer $62500- repairs?

OR, what did I do wrong, what am I not understanding?
TIA
MRead

Thank you very much. You've been a big help, and I voted for you.
I will check the other numbers as well as I can. I've been trying to learn this math.
MRead

Thanks. I will follow this strategy.

Next question, HOW MUCH lower than the mls price should I go?
As these wiill be rentals, do i follow the 2% rule?

On a house that will rent for 1250/ .02=65500 - repairs, even though it's listed at $199500?
So I offer $62500?
TIA
MRead

Are you all submitting offers through an agent, or directly to the bank? Must be the listing agent, right?

TIA
MRead

A house I want to buy to hold is listed in the mls at $130K. It was recently under contract via short sale, indicated by the listing designation. “Short sale†is not in the description. That offer fell apart, and it is now active again. I want to make a short sale offer on it

According to property managers, which I would use, it will rent at $775-850 per month. I haven’t seen inside yet. The exterior shows its age and may need a little work other than cleanup and a little landscaping. The description says it’s in good condition. It’s been empty for 6-8 months. In the last 6 months, nearby houses sold from 85 to 125K, but don’t know if they’re similar size.

Based on what I read in other sections, in order to make any profit on this, the most I should pay would be about $40,000, and that a first offer should be much lower.

How realistic is it that I would get it for anywhere near that 40K? If that’s the cost, I can pay cash.

How should I approach this? I don’t have the knowledge or skill to negotiate with the lender, and don’t know if that is an option since it is on the mls.

I have a contract I can fill in and present to the lister, but will he even consider it? Will he respond with anything other than guffaws or contempt? What incentive does the he have to sell at such a low amount since his commission is based on the sale price?
TIA
MRead

Timely for me. I was looking on the mls recently for really cheap houses to buy to rent out for a long time. None were in areas I am familiar with, and were on streets whose names I don't recognize.

I have a pre-purchase checklist, but your questions would have to be answered before even looking at a house. Neighborhood statistics including demographics and crime rate are important.

Your #4-an area where people want to live?-Not the ones I've seen so far. Most were in outlying areas, distant from employment, schools, shopping, most social interests, and public transportation.

Your questions have to do with the REAL cost of owning such properties, as opposed to buying

M Read